A “preferred” Bitcoin (BTC) price signal could be about to turn bullish – and the rise has always happened, the data shows.
As Noted By podcast host Preston Pysh on Oct. 18, the price ratio achieved by long-term and short-term holders (LTHSTH-RPR) looks set to print a bullish flag.
The graph foreshadows the return of the bulls
It might sound wordy, but LTHSTH-RPR is one of the most accurate Bitcoin price indicators. Its creator, Bitcoin 2021 conference organizer Dylan LeClair, confirmed his own optimism based on his readings in late September.
âTLDR: The lower the ratio of short-term / long-term realized prices, the more bullish I will become,â he wrote in an explanatory document. Twitter feed.
âIn the end, all the bears will die. “
Now, with the indicator trending downward for several months, it’s high time for a rebirth – and BTC / USD has always benefited from it.
Under the hood, LTHSTH-RPR shows the cost basis of long term holders and short term holders. A long-term holder is defined by the chain analysis company Glassnode as an address containing coins that have not moved for at least 155 days.
âWhen the realized price ratio STH: LTH increases, it means that the STH cost base increases relative to the LTH cost base, and vice versa,â added LeClair.
âBTC rises when the marginal seller is exhausted. This is why you see that the cost base of LTHs remains stagnant during explosive bull runs, while the cost base of STHs (many of which are new market participants) is exploding – there just isn’t enough of parts for everyone.
So far, the LTH cost base has not been eclipsed by the STH cost base – when this happens, the current downtrend should end.
“Up only” remains the story
As Cointelegraph reported, LTHSTH-RPR is just one of many BTC price measures that have supported the bulls in recent weeks.
Related: Record Weekly Close – 5 Things To Watch In Bitcoin This Week
Everything from on-chain metrics to network fundamentals and even pure math suggests that a further rise is imminent for Bitcoin – widely expected from the fourth quarter of the year after a half event.
Nonetheless, analysts are already watching the market for an exit. The impact of exchange-traded fund (ETF) launches this week is also not expected to be a market driver in the near term.